WAEC SSCE - Financial Accounting - 2019

Use the following information to answer the question below

A firm bought a lathe machine for Le 45,600 on 1s January 2015. The life span was estimated to be 20 years while scrap at the end of the period was valued at Le 1,600. It was to be depreciated by the fixed installment method.

 The depreciation per annum is 

Answer Details

The fixed installment method of depreciation assumes that the asset loses an equal amount of value each year over its useful life. To determine the depreciation per annum using this method, we subtract the salvage value (scrap value) from the original cost of the asset and then divide the result by the useful life in years. In this case, the original cost of the lathe machine is Le 45,600, and the salvage value is Le 1,600. The useful life of the machine is 20 years. Therefore, the annual depreciation is: Depreciation = (Original cost - Salvage value) / Useful life Depreciation = (45,600 - 1,600) / 20 Depreciation = 44,000 / 20 Depreciation = 2,200 Therefore, the depreciation per annum for the lathe machine is Le 2,200.

Companies issue shares to the public in order to 

Answer Details

Companies issue shares to the public in order to raise capital. When a company issues shares, it is essentially selling ownership in the company to investors in exchange for funds. These funds can then be used to invest in new projects, expand the business, pay off debts, or for any other purpose that the company deems necessary. In return, shareholders receive a portion of the company's profits, as well as voting rights and other benefits depending on the type of shares they own.

The partner whose liability goes beyond his capital is a 

Answer Details

A general partner is a type of business partner whose liability goes beyond their capital. This means that if the business is sued or incurs debt, the general partner is personally responsible for paying those debts, even if they go beyond the amount of money they have invested in the business. In simple terms, a general partner is fully responsible for the financial obligations of the business, unlike a limited partner whose liability is limited to the amount of money they have invested. So, if you are a general partner in a business, you are responsible for all of the debts and obligations of the business, even if they are more than the amount of money you have invested.

To show the evidence of payment to a government ministry, the revenue collector issues a 

When closing stock is undervalued, the cost of goods sold would be 

The directors of Olu Ltd. recommended a dividend of 10% on 1,000,000 ordinary share capital of N2.00 each. The amount of dividend declared is 

Answer Details

The amount of dividend declared is N200,000. To calculate this, you first need to find out the total value of the company's ordinary share capital, which is 1,000,000 shares x N2.00 per share = N2,000,000. Next, you take 10% of this amount to find the dividend, which is 10% of N2,000,000 = N200,000. So the directors of Olu Ltd. declared a dividend of N200,000.

An effect of increase in the provision for depreciation is 

Use the following information to answer the question below

Opening capital ---10,800
Drawings----------- 2,500
Trade creditors ----2,560
Trade debtors ------2,880
Cash in hand -------1,000
Net profit------------- 6,000

The closing capital is

Answer Details

The closing capital can be calculated using the following formula: Closing Capital = Opening Capital + Net Profit - Drawings Plugging in the values from the information given, we get: Closing Capital = 10,800 + 6,000 - 2,500 Closing Capital = 14,300 Therefore, the closing capital is 14,300. This represents the total amount of capital that the business has at the end of the accounting period after taking into account the net profit earned during the period and the amount withdrawn by the owner. The closing capital is an important figure that helps the business owner to understand the financial health of the business and make decisions about its future operations.

Use the following information to answer the question below

Ajem and Ogah were in partnership sharing profits and losses in the ratio 2:3. Interest on capital and drawings were 5% and 3% respectively. The following details relate to the partnership for the year 2017.
                                Ogah     Ajem
Capital Account     60,000    65,000
Current Account    40,000    50,000
Drawings              20,000     30,000
Salary                  10,000        -
Netprofit was 100,000

Ogah's share of profit was

Answer Details

First, we need to calculate the interest on capital for both partners. Interest on Ogah's capital = 5% of 60,000 = 3,000 Interest on Ajem's capital = 5% of 65,000 = 3,250 Next, we need to calculate the interest on their drawings. Interest on Ogah's drawings = 3% of 20,000 = 600 Interest on Ajem's drawings = 3% of 30,000 = 900 Now, we can calculate the total amount of interest for each partner by adding the interest on their capital and the interest on their drawings. Total interest for Ogah = 3,000 + 600 = 3,600 Total interest for Ajem = 3,250 + 900 = 4,150 We can now calculate the adjusted capital for each partner by adding their capital account, current account balance, and subtracting their drawings and the interest on their drawings. Adjusted capital for Ogah = 60,000 + 40,000 - 20,000 - 600 = 79,400 Adjusted capital for Ajem = 65,000 + 50,000 - 30,000 - 900 = 84,100 The total adjusted capital for the partnership is the sum of the adjusted capital for both partners. Total adjusted capital = 79,400 + 84,100 = 163,500 Now, we can calculate each partner's share of the profit. Ogah's share of the profit = (2 / 5) x (100,000 - 10,000 - 3,600) = 51,150 Ajem's share of the profit = (3 / 5) x (100,000 - 10,000 - 4,150) = 48,850 Therefore, the answer is option A - 51,150.

Goods bought from Sanmah for Le1,600 was entered into Shamail's Account. This is an error of

When bank charges are deducted from a customer's account, the balance on the bank statement would be

Answer Details

The balance on the bank statement would be less than the cash book balance if bank charges are deducted from the customer's account. The cash book balance is the record of all the money that has come into and gone out of a customer's account as recorded by the customer. However, the bank statement is a record of all transactions in a customer's account as recorded by the bank. When the bank deducts charges such as service fees or overdraft fees, these charges are not recorded in the customer's cash book, but they are recorded in the bank's records and will appear on the bank statement. This means that the balance on the bank statement will be lower than the balance recorded in the customer's cash book.

Interim dividend paid in a year is 

Capital and drawings accounts are kept in the 

Sulah took two textile materials worth N500 from his business for his children's use. This would be treated as 

Answer Details

This would be treated as "drawings". Drawings refer to the goods or cash that the owner of a business takes out of the business for personal use. In this case, Sulah took two textile materials worth N500 from his business for his children's use. Since this was not a sale or a loan, but rather an extraction of goods for personal use, it would be considered as "drawings" from the business. It is important for business owners to keep track of their drawings as it affects the profitability and financial position of their business.

Subscription owing $ 6,000 (31/12/2014);
Subscription in advance $ 4,000 (31/12/2014);
Cash received as subscription during the year was $ 80,000.
 

The subscription for the year 2014 was?

Kadiri paid his debt to Suleman by cheque. The accounting entries in Kadiri s books are: debit

The concept which seeks to prevent profits from being overstated is 

Answer Details

The concept that seeks to prevent profits from being overstated is "prudence." Prudence is a principle of accounting that requires caution and conservatism when making estimates or judgments about financial transactions. It encourages accountants to be careful not to overstate the value of assets or profits, and to recognize potential losses or liabilities in a timely manner. By applying the principle of prudence, accountants ensure that financial statements accurately reflect the financial position and performance of a business. This helps to maintain the credibility and integrity of financial reporting, and enables stakeholders to make informed decisions based on reliable information.

Where there is provision for depreciation, fixed asset is shown in the balance sheet at

i. cost less depreciation for the period only.
ii. cost less total depreciation to date.
iii. written down values

Use the following information to answer questions the question below
                         01/01/17    31/12/17
Trade creditors   630,000    780,000
Stock                 540,000     480,000
Trade creditors
Stock
Cash paid to trade creditors in 2017 was N2,700,000. 00

What was the purchase for 2017

The primary concern of shareholders in a business is the 

Answer Details

The primary concern of shareholders in a business is the dividend payable. Dividends are payments made by a company to its shareholders, typically from the company's profits. Shareholders invest in a business with the expectation of receiving a return on their investment, and one way they can receive this return is through dividends. Shareholders generally want to see the company perform well so that they can receive higher dividends. While other factors such as the ability to pay interest and welfare of employees may also be important to shareholders, the primary concern is typically the dividend payable.

Uncredited cheques refer to cheques not yet credited
 

Use the following information to answer the question below

Cost of raw materials available------ 32,000
Manufacturing wages -----10,000
Factory expenses-----5,000
Royalty-------3,000
Factory rent ------2,000
Depreciation of plant and machinery---- 5,000
closing stock of raw materials-------- 3,000

The prime cost is 

Use the following information to answer question below

April 11:Sold goods for cash N50,000 
April 20: Bought goods for cash N30,000
April 26: Bought postage stamp N5,000 
April 28: Cash sales N49,000
April 29: Cash purchases N11,000 
April 30: Paid salaries N18,000 

Total cash receipts for the period is 

Answer Details

The total cash receipts for the period can be calculated by adding up all the cash received during the period. From the information given, the following cash transactions took place: Cash sales on April 11 = N50,000 Cash sales on April 28 = N49,000 Therefore, the total cash receipts for the period is: N50,000 + N49,000 = N99,000 So the correct option is (A) N99,000.

Use the following information to answer the question below

April 11: Sold goods for cash N50,000 
April 20: Bought goods for cash N30,000
April 26: Bought postage stamp N5,000 
April 28: Cash sales N49,000
April 29: Cash purchases N11,000
April 30: Paid salaries N18,000

The cash balance at the end of the period is

Answer Details

To determine the cash balance at the end of the period, we need to add up all the cash inflows and subtract all the cash outflows. Starting with the cash inflows: - Cash sales on April 11: N50,000 - Cash sales on April 28: N49,000 Total cash inflows: N99,000 Moving on to the cash outflows: - Bought goods for cash on April 20: N30,000 - Bought postage stamp for cash on April 26: N5,000 - Cash purchases on April 29: N11,000 - Paid salaries on April 30: N18,000 Total cash outflows: N64,000 To determine the cash balance, we subtract the total cash outflows from the total cash inflows: Cash balance = Total cash inflows - Total cash outflows Cash balance = N99,000 - N64,000 Cash balance = N35,000 Therefore, the cash balance at the end of the period is N35,000.

Where fixed capital account is maintained, partners Share of profit is transferred to the 

Answer Details

In accounting, partners' share of profit is transferred to the credit side of the partner's current account. The current account is a record of the transactions related to each partner's capital contributions, drawings, and share of profits or losses. So, when a profit is made, the partners' share of that profit is credited to their current account to show an increase in their capital balance. On the other hand, the fixed capital account is a record of the long-term investments made by the partners into the business, such as buildings, machinery, and equipment. The fixed capital account is not usually affected by the profits or losses of the business, but rather by any changes in the value of the long-term investments. So, in summary, the partners' share of profit is credited to their current account, while the fixed capital account is maintained separately.

Use the following information to answer the question below

Opening capital ---10,800
Drawings----------- 2,500
Trade creditors ----2,560
Trade debtors ------2,880
Cash in hand -------1,000
Net profit------------- 6,000

The working capital is

The concept that recognizes revenue at the time of sale and not only when cash is received is 

A quality of accounting information is that it should be
 

Answer Details

The quality of accounting information is that it should be "verifiable". This means that the information should be capable of being checked and confirmed by independent sources or methods. In other words, the accuracy and truthfulness of the accounting information should be able to be verified by others to ensure that it is reliable and trustworthy. Verifiability is important in ensuring that financial statements are free from bias or manipulation, which is crucial for making sound business decisions.

Use the following information to answer the question below

Ajem and Ogah were in partnership sharing profits and losses in the ratio 2:3. Interest on capital and drawings were 5% and 3% respectively. The following details relate to the partnership for the year 2017.
                                Ogah     Ajem
Capital Account     60,000    65,000
Current Account    40,000    50,000
Drawings              20,000     30,000
Salary                  10,000        -
Netprofit was 100,000

Ajem's current account balance was

A feature of government accounting is that the

Set-off is carried out in the control account when 

Use the following information to answer questions the question below
                         01/01/17    31/12/17
Trade creditors   630,000    780,000
Stock                 540,000     480,000
Trade creditors
Stock
Cash paid to trade creditors in 2017 was N2,700,000. 00

The cost of goods sold was? 

Quick ratio is calculated as X-y:z, where

Answer Details

The quick ratio is a measure of a company's ability to pay off its short-term debts with its most liquid assets. It is calculated by subtracting the value of a company's stock (raw materials, work in progress, finished goods) from its current assets, and then dividing the result by the company's current liabilities. So, the correct option is (3): x = current assets; y = stock and z = current liabilities. This is because the quick ratio formula subtracts the stock (inventory) value from the current assets to arrive at the most liquid assets available for paying off short-term obligations. And, the current liabilities reflect the company's immediate debts that must be paid off in the short term.

The mark-up on a product is 2/3. The margin is 

An example of a nominal account is

The net book value of the machine as at 31st December 2017 was

Debtors Control Account is kept in the 

Interest on drawings amounted to 

Use the following information to answer the question below

Cost of raw materials available------ 32,000
Manufacturing wages -----10,000
Factory expenses-----5,000
Royalty-------3,000
Factory rent ------2,000
Depreciation of plant and machinery---- 5,000
closing stock of raw materials-------- 3,000

Factory overhead cost is 

Goodwill is recognized in partnership when 

In a single-entry accounting, purchases are ascertained using a

ln a not-for-profit organization, the accumulated fund is

When the letter "C" is written in front of an entry in the folio column of a cash book, it shows a 

Answer Details

When the letter "C" is written in front of an entry in the folio column of a cash book, it shows that it is a contra entry. A contra entry is a type of transaction in accounting that involves two accounts. In this type of entry, the debit and credit entries cancel each other out, resulting in a net effect of zero. In other words, if you were to add up the two entries, the total would be zero. This type of entry is used when money is transferred from one account to another, such as when you transfer money from your checking account to your savings account.

In public sector accounting, salaries of employees are classified as 

Answer Details

In public sector accounting, salaries of employees are classified as recurrent expenditure. Recurrent expenditure refers to regular and routine expenses incurred by an organization in carrying out its day-to-day activities. These expenses are incurred repeatedly and are necessary for the normal functioning of the organization. Salaries of employees are a type of recurrent expenditure as they are paid regularly, such as monthly or bi-weekly, to compensate employees for their services. This is in contrast to capital expenditure, which refers to the costs incurred for acquiring and improving assets such as land, buildings, and equipment. Therefore, since salaries are a routine and regular expense necessary for the day-to-day operations of an organization, they are classified as recurrent expenditure in public sector accounting.

The document used to correct an undercharge on an invoice is

(a) What are closing entries?

(b) Distinguish between a branch and a department.

(c) State four reasons for the preparation of branch accounts.

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What are the Limitations of ratio analysis

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(a) Outline three reasons for which a cheque would be dishonored.

(b) Explain the following terms:
i. petty cash float.
ii. contra entries.
iii. imprest system

(c) State three advantages of keeping petty cash book using imprest system. 

Answer Details

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Explain the following items and outline how they are treated in the final accounts:

(a) increase in provision for doubtful debts

(b) decrease in provision for doubtful debts

(c) provision for discount on debtors

(d) provision for discount on creditors

(e) provision for depreciation

Answer Details

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The following transactions were extracted from the books of Adamu, a sole trader for the month of March 2016.

March 4: Sold 80 bags of maize on credit to Papuk at N255 per bag subject to a trade discount of 5%.
March 10: Sold goods on credit to Abass for N1,170.
March 15: Received a cheque from Papuk for the amount due, less a discount of 10%.
March 20: Received cash of N900 from Abass.

You are required to prepare:

(a) Sales Journal;

(b) Customers' Accounts in the Sales Ledger;

(c) Sales Ledger Control Account

Answer Details

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(a) State three effects of drawings on the business of a sole proprietor.

(b) Explain how the following items are treated in the balance sheet:
i. accrued expenses
ii. prepaid expenses
iii. accrued income.
 

Answer Details

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Ubochi and Hassanah started a partnership business on 1st January 2015. They contributed D 300,000 and D 250,000 respectively as capital. Their partnership deed stated that:

i. interest of 8% should be paid on capital per annum

ii. Hassanah would be paid D 10,000 monthly as a salary

iii. interest on drawings is 5%

iv. the profits are to be shared in the ratio 3:2 respectively. At the end of the year, the profit made was D300,000. During the period, Ubochi and Hassanah made drawings of D20,000 and D15,000 respectively.

You are required to prepare:
(a) Profit and Loss Appropriation  Account for the year ended 31st December 2015;

(b) Partners' Current Accounts.

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(a) what are the sources of revenue to a federal government

(b) What are the advantages of cash basis in public sector accounting

(c) Mention five reasons for public sector accounting

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(a) Give reasons for including outstanding liabilities in the Balance Sheet

(b) How do you record an income generating activity of a bar in a not-for-profit-making organization:

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On 30th September 2017, Adedeji's cash book showed a debit balance of N7,600. However, his bank statement showed an overdraft balance of N1,880. On investigation, the following details were discovered:

i. A standing order of N160 had not been entered in the cash book

ii. Bank charges of N40 did not appear in the cash book

iii. Cash paid into the bank for N400 had been entered in the cash book as N360

iv. A cheque of N200 received from a customer was dishonoured

v. The bank received a credit transfer of N400 from a customer

vi. A cheque of N1,360 paid to Dexter Ltd had been entered in the cash book as N1,720

vii. A receipt of N40 shown on the bank statement had not been entered in the cash book;

viii. A cheque drawn amounting to N160 paid is still with the supplier

ix. Receipts of N3,600 paid into the bank on 30th September 2017 did not appear on the bank statement until October 2017

x. A cheque of N1,080 paid into the bank had been Wrongly credited by the bank as GH¢ 600

xi. A transfer of N6,000 to the bank had not been recorded in the cash book.

You are required to prepare

(a) Adjusted Cash Book;

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(a) What is a Ledger

(b) List out the uses of an invoice to the seller and the buyer

(c)  Advantages of dividing the ledger into different classes

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